Top House Democrats have introduced the Billionaire Minimum Income Tax Act, which would enact President Joe Biden's proposal to require households worth over $100 million to pay at least a 20% tax rate on their full income, including unrealized gains.
The bill has 32 co-sponsors and was introduced by Reps. Steve Cohen, D-Tenn., and Don Beyer, D-Va., chairman of the Joint Economic Committee in late July. The lawmakers said they introduced the bill "after extensive consultation with the White House and Treasury Department officials."
House Democrats may try to insert this bill into the Inflation Reduction Act, which passed the Senate and is to be voted on by the House Friday.
A section-by-section review of the bill states: "The minimum tax imposed cannot be greater than 40% of the amount by which the taxpayer's net worth exceeds $100 million (or half in the case of a separate return), such that the 20% rate fully kicks in for taxpayers with a net worth over $200 million." For example, the minimum tax on a joint-filing taxpayer with net worth of $200 million would be capped at $40 million.
"The ultrawealthy pay very low tax rates because their affluence derives primarily from the soaring value of their assets and our current tax code lets billionaires avoid taxes on gains unless and until they sell their assets," Cohen said. "So while working families pay taxes on each and every paycheck or pension payment, the ultrawealthy can make hundreds of millions of tax-free dollars a year."
